Layer 2 tunnelling establishes a tunnelling network between multiple distant networks to create a virtual private network (VPN). Layer 2 tunnel creation can be either manually by entering correct command to setup the tunnel interfaces, or automatically by having a service in network devices to negotiate the correct tunnel interfaces.
Layer 2 Tunnelling Protocol (L2TP), a standard published by Internet Engineering Task Force, is a tunnelling protocol used to support layer 2 virtual private networks (VPNs). It does not provide any encryption or confidentiality by itself; it relies on an encryption protocol that it passes within the tunnel to provide privacy. IPsec is often used to secure L2TP packets by providing confidentiality, authentication and integrity. The combination of these two protocols is generally known as L2TP/IPsec.
The problem of implementing L2TP is performance because of the number of bytes remaining available for payload is reduced. Under L2TP/IPsec, the number of bytes remaining available for payload is further reduced because of multiple levels of encapsulations. In addition, IPsec is relatively complicated to setup and maintain. The implementation of L2TP or L2TP/IPsec over bonded networks, which two or more logical or physical network connections are combined, further reduces the number of bytes remaining available for payload and increases complexity of setting and maintenance.